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Levelized cost analysis for renewable ammonia production in Chile

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  • Pozo, David
  • Sauma, Enzo
  • Bolado-Lavín, Ricardo

Abstract

Renewable ammonia production is a crucial step towards decarbonizing energy-intensive industries, but its economic viability is hindered by high capital costs and renewable resource availability. We develop a stochastic optimization framework to estimate the levelized cost of ammonia (LCOA) in any location in the world, accounting for the variability of wind and solar energy. The methodology is based on optimizing the portfolio of renewable sources and the capacity of the ammonia production facility while ensuring the three pillars of renewable fuel production: additionality, temporal matching, and geographic correlation. Formulated as a stochastic linear program, the model also accounts for inter-annual climate variability.

Suggested Citation

  • Pozo, David & Sauma, Enzo & Bolado-Lavín, Ricardo, 2025. "Levelized cost analysis for renewable ammonia production in Chile," Energy, Elsevier, vol. 335(C).
    • Handle: RePEc:eee:energy:v:335:y:2025:i:c:s0360544225031962
    DOI: 10.1016/j.energy.2025.137554
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    References listed on IDEAS

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    1. Rouwenhorst, Kevin H.R. & Van der Ham, Aloijsius G.J. & Mul, Guido & Kersten, Sascha R.A., 2019. "Islanded ammonia power systems: Technology review & conceptual process design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    2. Cesaro, Zac & Ives, Matthew & Nayak-Luke, Richard & Mason, Mike & Bañares-Alcántara, René, 2021. "Ammonia to power: Forecasting the levelized cost of electricity from green ammonia in large-scale power plants," Applied Energy, Elsevier, vol. 282(PA).
    3. Moreira, Alexandre & Pozo, David & Street, Alexandre & Sauma, Enzo & Strbac, Goran, 2021. "Climate‐aware generation and transmission expansion planning: A three‐stage robust optimization approach," European Journal of Operational Research, Elsevier, vol. 295(3), pages 1099-1118.
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